Desert-dirts back at it

Science moves but slowly, slowly, creeping on from point to point. What Tennyson didn’t add was that pseudo-science just keeps going in circles. Thus several companies, all quoted on the over-the-counter market, are once again at play in Arizona and Nevada’s fields of dirt.

The highest-profile retread is Central Minera (CENMF-O), successor to Delgratia Mining, which is set to reactivate its Josh property in southern Nevada. Delgratia’s stock crashed and burned in May 1997 when it was revealed that previous reports of high gold grades across long drill intersections at Josh were based on assays of salted samples (T.N.M., June 30/97). Central Minera management now has a 1999 report that recommends “further investigation” on the property, despite at least two previous consultants’ reports that recommended the company cease work there. It has also concluded a deal to buy, for $1 million, 1 million shares in Cactus Gold, a private company controlled by Charles Ager. Ager, president of Delgratia at the time of the 1997 scandal, was the original vendor (through companies he then controlled) of the worthless Josh property.

Central Minera now owns 1.8 million shares in Cactus Gold, and says it will be discharging “a responsibility to its shareholders to investigate the property further, as the [1999] report suggests.” This will take the form of a pilot plant on the property to “allow Cactus to test the scale-up of their unique metallurgical protocol and to further confirm [sic] the grade and extractability of the platinum group metals and gold from the Eldorado project.”

Can-Cal Resources (CCRE-O) has installed a pilot plant at its Pisgah Hill property in California, despite earlier reports showing probable alluvial gold grains in samples from the site (T.N.M., Sept. 4-10/00). The company says it is testing extraction processes on broken material stockpiled at the Pisgah site and that it “anticipates a scaling-up of the pilot plant’s extraction capacity during this quarter.”

Can-Cal’s latest results from Pisgah Hill come from a sampling campaign where the company sent the reputable Inspectorate America laboratory four dor beads derived from pre-treatment processes. The lab’s analyses of the dor beads imply gold grades over 300 grams per tonne in three samples from the existing stockpile. A fourth sample, if the numbers are to be believed, ran 166 grams platinum, 41 grams palladium and 13 grams rhodium per tonne.

Another returning player on the southwestern scene is International Star (isri-o), which announced last October that it was starting exploration on two properties in Arizona: Wikieup, in Mohave Cty., and Detrital Wash, northwest of Kingman.

Wikieup, a 51-claim block in the heart of western Arizona’s desert-dirt country, was acquired from private Gold Standard Mines in a transaction that closed on Feb. 20 following a due-diligence period. The acquisition also included “the exclusive rights to an extraction procedure for the recovery of precious metals developed by the claims owner.” International Star had engaged a chemist, Richard Veneski, to act as a consultant in October of last year and perform the due-diligence investigation.

International Star announced a relatively modest financing in January; the company placed 400,000 units at US25 for proceeds of US$100,000. The units consist of one share plus a warrant exercisable at US75 for two years. It also cleared off earlier debt by issuing about a million shares at US25 to its creditors, who in March 2000 were owed about US$258,021.

In October, the company began sampling at Wikieup under Veneski’s direction. The company asserts that it sampled the soils, “treated them with the extraction process” acquired as part of the property deal, and poured dor bars weighing 5 to 248 grams. These bars — not the original samples — were to be sent to commercial laboratories for analysis. Those results have not been released, except for a statement from International Star that the labs had detected palladium, platinum, gold and silver in the dor. It gave no numbers.

No concrete plans have yet been announced for the Detrital Wash property.

International Star had previously worked on another Mohave Cty. property, Tyro, situated near Bullhead City. In April 1998, management predicted great things for Tyro based on results supplied by Auric Metallurgical Laboratories of Salt Lake City, Utah, that showed grades of 63 grams gold, 30 grams platinum and 9 grams palladium per tonne in composite samples. A subsequent bulk sample, also processed by Auric, returned calculated head grades of 27.8 grams gold, 48.8 grams silver, 1.5 grams platinum, and 0.6 gram palladium per tonne. Subsequent in-house work through 1999 convinced International Star that its production costs would be less than US$75 per short ton (US$82.50 per tonne) and that it would recover US$270 per short ton (US$297 per tonne) less royalties of US$20.

Auric Metallurgical has since been named in a lawsuit over the Blackhawk property in Idaho, where it consulted for Intergold (IGCO-O).

Also in the lists is Hexagon Consolidated Corporation of America (HCCA-O), formerly Health Care Centers of America. HCCA holds the Skull Valley property, about 20 km west of Prescott, Ariz., in Yavapai Cty.

Hexagon is currently in a dispute with the Arizona State Land Department, which issued a regulatory order denying the company a plan of operation. At a hearing in January, the validity of the company’s work was called into question by state regulators.

In response, HCCA produced a report from an Arizona-registered assay lab that certified 45.2 grams platinum, 6.2 grams palladium, 63.1 grams iridium, 33.2 grams gold, 40.1 grams silver, and 128 grams rhodium per tonne in a sample from the base of the Skull Valley pit. A second sample, from the pit wall, was reported to contain 44.2 grams platinum, 7.4 grams palladium, 148.3 grams iridium, 16.1 grams gold, 57.2 grams silver, and 41.8 grams rhodium per tonne.

In May and June of 1998, HCCA described itself as having “a network of multi-disciplinary health care centres” and said it was “preparing to market its precious metals ore inventory.” The company claimed a resource of “well in excess of” 450,000 tonnes at Skull Valley, grading 505 grams osmium, 300 grams iridium, 253 grams ruthenium, 180 grams platinum, 69.6 grams silver, 51.4 grams gold and 28.1 grams palladium per tonne. In a measure of its success at that time, the company subsequently consolidated its share capital, trading one new share for 1,000 old shares.

In 1994, securities regulators in two U.S. states made cease-and-desist orders against the company’s chairman and president, Maurice Furlong, his son Craig, and James Troester, who then made up the board of HCCA’s predecessor company SCN Ltd. In 1988, a U.S. Federal court issued an injunction against the sale of shares in SCN “unless and until” the company was registered with the Securities and Exchange Commission.

Another regulatory decision lit up the twilight world of desert dirt when the Arizona Board of Technical Registration found that Richard Hewlett, once a consultant to Maxam Gold (mxam-o) and LS Capital, had engaged in the practice of geology without registration in the state. Hewlett was assessed a civil penalty of US$2,000 and gave the professional board an Assurance of Discontinuance.